Fundamental Overview
Gold continues to trade in a tight range as the market awaits the key catalysts this week. As a reminder, the Fed is now very focused on the labour market as Fed Chair Powell said that they will not welcome any more weakness and will do everything they can to keep it strong.
Therefore, the NFP report on Friday will decide whether the central bank will go with a standard 25 bps cut in September or take a more aggressive approach with a 50 bps cut. Before that, we will get other important releases like the ISM Manufacturing PMI tomorrow which last month triggered the “growth scare”.
In the bigger picture, gold should remain supported as real yields fall due to the Fed’s rate cut cycle, but in the short-term, strong US data might weighed on the market a bit.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold got stuck in a tight range as the lack of catalysts kept the market at bay. Nonetheless, the buyers remain in control for now and they will keep targeting new all-time highs. The sellers, on the other hand, will want to see the price falling back below the 2480 level to turn the bias more bearish and position for a drop into the 2430 level next.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the range between the 2480 support and the 2530 resistance. The market participants will likely keep on “playing the range” by buying at support and selling at resistance until we get a breakout on either side.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see the choppy price action of the last two weeks. There’s not much to do here other than waiting for a breakout. The red lines define the average daily range for today and given the lack of catalysts and the US holiday we shouldn’t expect any breakout today.
Upcoming Catalysts
Tomorrow we have the US ISM Manufacturing PMI. On Wednesday, we have the US Job Openings. On Thursday, we get the US Jobless Claims figures and the ISM Services PMI. Finally, on Friday, we conclude the week with the US NFP report.
